Question 1

A piece of jewellery costing $150 was marked up by 40% of the selling price. During the stores silver jubilee sale, the selling price was reduced to $175. What was rate of markdown during the sale?

Accepted Answer

The selling price before the sale was $150 + (40% of $150) = $150 + $60 = $210. The markdown to reduce the selling price to $175 from $210 is $35. The rate of markdown is ($35/$210) * 100% = 16.7%.

Question 2

At Lowe's, each contractor receives 5% discount for his purchases. A contractor building a deck for a customer pays $7144.89 for the material he bought. What is the list price of the material?

Accepted Answer

If the contractor receives a 5% discount, he pays 95% of the list price, which means:
0.95x = 7144.89
x = 7144.89/0.95
x = 7520.94
Therefore, the list price of the material is $7520.94.

Question 3

The cost of a TV to Leons is $377.00. If Leons wants a 30% rate of markup on the selling price, determine the markup.

Accepted Answer

The markup is calculated by multiplying the cost by the markup percentage as a decimal:
Markup = $377.00 x 0.30 = $113.10
Therefore, the selling price would be:
Selling price = $377.00 + $113.10 = $490.10
So the markup is $113.10.

Question 4

United Furniture purchased RF42 model refrigerators from Samsung for $2751 each in 2012. The store marked up the price by 30% of the regular selling price. The store's overheads were estimated to be 10% of the regular selling price of each refrigerator in 2012. Following Christmas, Samsung introduced a new model. In order to make space for the new model, United Furniture decided to sell the RF42 model refrigerators at a markdown of 25%. How much was the operating profit or loss on each refrigerator as a result of the sale?

Accepted Answer

The answer of United Furniture purchased RF42 model refrigerators from...

Question 5

At Lowe's, each contractor receives 5% discount for his purchases. A contractor buys a saw which is listed at $149 less 10%. What is the actual price paid by the contractor?

Accepted Answer

The answer of At Lowe's, each contractor receives 5% discount...

Question 6

OPG received an invoice from its supplier on May 9 for $32 479.87 dated May 7 with terms 3/10, 1/20, n/60. OPG always makes full payment on the first working day 25th of a given month. What payment will settle the account?

Accepted Answer

The answer of OPG received an invoice from its supplier...

Question 7

An invoice for $1121.45 with terms 2/10, n/30 is dated March 7. The contractor received it on March 14. What payment will settle the invoice if the contractor pays it March 20?

Accepted Answer

The answer of An invoice for $1121.45 with terms 2/10,...

Question 8

Cost of electricity to the grid is calculated in $ per MWh. On a typical day, the Darlington plant produces an average of 84 000 MWh. The OEB recently ruled that Darlington would receive $51 per MWh of electricity produced. The cost of fuel is $5 per MWh. Operations and maintenance costs are $37 per MWh. How much profit will the Darlington plant make in a year?

Accepted Answer

The answer of Cost of electricity to the grid is...

Question 9

What single discount rate is equivalent to multiple discounts of 13% and 25%?

Accepted Answer

The answer of What single discount rate is equivalent to...

Question 10

United Furniture purchased RF42 model refrigerators from Samsung for $2751 each in 2012. The store marked up the price by 30% of the regular selling price. The store's overheads were estimated to be 10% of the regular selling price of each refrigerator in 2012. Following Christmas, Samsung introduced a new model. In order to make space for the new model, United Furniture decided to sell the RF42 model refrigerators at a markdown which results into a break-even. Calculate the markdown.

Accepted Answer

The answer of United Furniture purchased RF42 model refrigerators from...

Question 11

Fresh Co advertises to price match its competitors. This week Fresh Co sells grapes for $3.99 per pound. No Frills has sale on grapes and is selling at $2.69 per pound. Calculate the rate of markdown for Fresh Co for the grapes to price match competition.

Accepted Answer

The markdown rate is calculated as the difference in price divided by the original price, then multiplied by 100 to get a percentage. So, the markdown for Fresh Co to match No Frills' price is (($3.99 - $2.69) / $3.99) * 100 = 32.6%.

Question 12

Kalotyre retails its Bridgestone tires at $141.67 each. They purchase the tires from the factory for $103.11 each. Overhead expenses are 20% of the selling price. Determine the operating profit per tire.

Accepted Answer

The answer of Kalotyre retails its Bridgestone tires at $141.67...

Question 13

Alpha computing is importing mother boards at a unit cost of $178. Alpha estimates that operating expenses per unit are 35% of cost. What should the selling price be if the desired operating profit per unit is 30% of the cost?

Accepted Answer

The answer of Alpha computing is importing mother boards at...

Question 14

National sports sets the selling price of the ice-hockey kit to include expected overhead expenses of 30% of the selling price and a desired profit of 50% of the selling price. Determine the selling price of the ice-hockey kit if it costs the store $79.81?

Accepted Answer

The answer of National sports sets the selling price of...

Question 15

Alia keeps his savings of $5000 in a current account at TD Bank for 3 years in order to avoid paying any banking fee. The rate of return for the current account is 0%. Mandated discount rate in Ontario is 2.5%. What is the worth of Alia's money in 3 years?

Accepted Answer

The answer of Alia keeps his savings of $5000 in...

Question 16

Kalotyre sells Bridgestone tires at $141.67 each. They purchase the tires from the factory for $103.11 each. Overhead expenses are 20% of the selling price. Determine the rate of markup on the selling price and the cost price?

Accepted Answer

The answer of Kalotyre sells Bridgestone tires at $141.67 each....

Question 17

An invoice for $1121.45 with terms 2/10, n/30 is dated March 7. The contractor received it on March 14. What payment will settle the invoice, if the contractor pays it the next day?

Accepted Answer

Since the terms are 2/10, n/30, the contractor can take a 2% discount if he pays within 10 days. Otherwise, the full amount is due in 30 days. March 17 is the 10th day from March 7. Since the contractor received the invoice a week later, the 10-day discount period already passed. Therefore, the contractor needs to pay the full amount of $1121.45. So the answer is D.

Question 18

HON received an invoice from its supplier on May 9 for $32 479.87 dated May 7 with terms 3/10, 1/20, n/60. HON pays $15,000 on May 11, $10 000 on May 13 and $2000 on May 21. What balance is still owed after May 30?

Accepted Answer

The answer of HON received an invoice from its supplier...

Question 19

Sears is adding a new line of John Deere lawn mowers. The cost of each such lawn mower is $321.00 with an operating cost of adding this line is estimated to be 40% of the cost of each unit. If Sears matches the competition's retail price of $649 on each lawn mower, what will be the operating profit per unit?

Accepted Answer

The operating cost of each unit is 40% of the cost of each unit, which is:
0.4 x $321.00 = $128.40

The revenue per unit after matching the competition's retail price is $649.00.

Therefore, the operating profit per unit is:
$649.00 - $321.00 - $128.40 = $199.60

Therefore, the best choice is B, with an operating profit per unit of $199.60.

Question 20

Kia Soul is sold at an MRSP of $18 500. In May 2013, Kia offered two incentives to its customers. The first incentive was cash back of $2000 on the final sale price, which includes 13% HST. The other one was no HST MRSP. Which incentive resulted in lesser cost to the customer?

Accepted Answer

The answer of Kia Soul is sold at an MRSP...

Quiz 6: Trade Discounts, Cash Discounts, Markup, and Markdown